Through some idle chat with my brother and his friend, I have got to know this website in Aug 2003.  It was a turning point of my investment journey because it is from here that I gained valuable insights of investment.  I gained valuable financial knowledge and through the sharing of various forum members, I decided to read up more on investment.  Initially, I started with library and before long I was purchasing books on investing.

This does not mean my investment reaps fruits immediately but with the new knowledge, the stock market finally makes sense to me.  It is from this point that I believe that investing in company’s share is a mean of an alternative income for me which will assist me in gaining my financial independence in the future.

It is from this point that I move away from price movements and more towards business analysis and learn how to value a company, to invest in a business that has the potential to grow in the future.

Of course, there is always an argument between technical analysis and fundamental analysis.  I decided I am not smart enough and do not have time to track prices everyday and hence will stick to learn how to analyze a business and make investment based on that.  Also, I preferred a bottom-up approach in investment instead of a top-down.  This leads me to diversify all my unit trust investment in cash by April 2005.

Like I mentioned, I am still in the learning process and till end of 2005, my CAGR from 2000 is only a paltry 2.5%.  Yes, it’s definitely higher than bank interest but it’s nothing exciting.  Also, I am still prone to purchase/sale due to my emotion.  I believe one reason is that I do not know enough of the company I am purchasing to have the confidence to hold it longer.

I started purchasing stocks using my CPF account too.  The initial reason is that I still do not have too much cash to invest and there were opportunities that were too good to give up.  I am more conservative with my CPF investment because it earned an interest of 2.5% per annum.  So the company I invested in must be a blue chip with good dividend or a company with proven track record and has huge potential to grow.  I will analyze the individual companies later on.   The return from my CPF account had been good, with 25% in unit trust (due to a 35% limit on stock investment), it has returned me a CAGR of 9% since 2001.

If I tracked my return using NAV, my cash portfolio returned a measly CAGR of 2.3% till 2005 and my CPF portfolio returned a CAGR of 20.9% till 2005.  Looking at the CAGR for my CPF portfolio, it does make me think whether I should invest in unit trust or just concentrate on stocks.  Of course, the only reason I invested in unit trust is simply because of 35% limit.  So should I speculate my CPF in other funds, or should I stick to an index fund?  Points for me to ponder.